The price elasticity of demand for petrol in the short run has been estimated to be 0.4. If a war in the Middle East causes the price of oil (from which petrol is made) to increase, how will that affect total revenue from petrol in the short run?

Question

Answer

Quantity demanded will not change; total revenue will rise.

Answer

Quantity demanded will stay the same; total revenue will fall.

Answer

Quantity demanded will decrease; total revenue will rise.

Answer

Total revenue will remain unchanged.

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The price elasticity of demand for petrol in the short run has been estimated to...

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